Currency is something of absolute value that can be used as a medium of exchange for an item offered for sale.
On the surface, “what is currency” seems like a pretty simple subject. But, it’s really not. So, we decided to tackle the subject to help people understand why the company is working on its products. First, to be considered a “currency”, as an instrument of value for trade, it must demonstrate six attributes - 1) scarcity, 2) divisibility, 3) utility, 4) transportability, 5) durability, and 6) “anti-counterfeit ability [1]”- that enable their widespread use in an economy. These attributes are needed for “currency” to be an effective method of exchange, which is a requirement for “money”. But without “value,” no currency can be “money” and the only true manner in which “currency” to be considered “money” is an irrevocable “guarantee of value.” So, “what is currency?” isn’t such an easy subject after all.
The printed “dollar” has many features the US Treasury continues to update in order to make the dollar “counterfeit resistant” which in itself is an admission the dollar gets counterfeited in mass. Also, from reading the many headlines over the last five years we can see the majority of cryptocurrency has this problem as well. The next issue is “utility”. Cryptocurrency fails time and again in this category due to the fact most people won’t accept it in trade for daily services and products so it has little “utility” as a currency. Now bouncing back to the printed “dollar” with congress telling the treasure to print more money not only has the dollar become less scarce, it has also become less valuable. Too bad no person in DC wants to admit the link between rapid creation of dollars and the rise of inflation. It’s pretty simple. The more dollars there are, the less each is worth. Ron Paul correctly stated the US Government was “debasing” the dollar.
How can someone just create currency out of thin air and it have any value? Great question. They can’t. There I said it. Currency created from nothing other than a promise of worth is called “fiat currency”. The term "fiat" is a Latin word that is often translated as "it shall be" or "let it be done". Fiat currencies only have value because the government maintains that value. There is no utility to fiat money in itself. Because fiat money is not linked to physical reserves, such as a national stockpile of gold or silver, it risks losing value due to inflation or even becoming worthless in the event of hyperinflation. Furthermore, if people lose faith in a nation's currency, the money will no longer hold value.
For governments allegedly, the first six attributes of currencies are justifications for the establishment of monetary policies used to control inflation and ensure that “currencies” are secure and safe to use. We know this not to be true, as the removal of value in the creation process [2] of the “currency” removed its status as “true money”. This shift away from “in hand value” shifted “trade” to the “faith in payment” which is purely defined as “faith in the political stability and sound management of a government which assures the payment of debts owed.” In other words, a “note” instead of a transaction of value. Currency today has become a “promise to pay” instead of a “payment.”
Crypto-advocates will attempt to state that “crypto” isn’t a fiat currency because there is always value in the blockchain process. Huh? First, we already know it has little or no “utility” and advocates will state “well, it’s more a ‘holder of value’”. How? Because of scarcity? Interestingly enough that is exactly what every advocate states, “yes it has value because it is scarce”. Existing crypto relies on the next person wanting it more than the current token owner to maintain its value. What happens when people lose their faith in crypto? Exactly, it becomes worthless overnight. So, as we can see, crypto has no durability either.
So, what exactly is currency? Setting aside all of the hype and the different theories of economics from a buyer and seller’s view, currency is something of absolute value that can be used as a medium of exchange for an item offered for sale. That is currency. So, the currency has to be an instrument/item of trust. Something of guaranteed value a seller is willing to take in exchange for an item sold. That is exactly what currency is and don’t let anyone tell you differently.
Our company is in the process of deploying a “digital money” that is an asset back and guaranteed, interest-bearing instrument of trust. A true currency, although we will not call it a currency due to our corporate policies. As a mechanism of exchange, it will be frictionless, seamless and immediately exchangeable between fiat printed currencies electronically at a moment’s notice. It is exactly what “crypto” was supposed to be but was unable to be due to its engineered failures as a “currency”. Stay tuned.